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February 25, 2020

Ex-UAW official pleads guilty in US court to kickbacks - Tip News

Ex-UAW official pleads guilty in US court to kickbacks

Ex-UAW official pleads guilty in US court to kickbacks
'Both the union and GM denounced Grimes' conduct' - By: AFP JEFF KOWALSKY

A former United Auto Workers official pleaded guilty on Wednesday to taking kickbacks and bribes from vendors connected to a training fund operated jointly by the union and General Motors.

Michael Grimes, who played a key role in the UAW's GM Department for more than a decade, admitted in federal court to taking over $1.5 million from vendors who did business between 2006 and 2018 with the fund, a training center for union members employed by GM.

Grimes and two as-yet unidentified union officials demanded bribes and kickbacks from vendors in exchange for contracts with the center, prosecutors said.

Grimes' plea came just days after federal agents raided the private home of Gary Jones, the UAW's current president.

Grimes, who under federal sentencing guidelines faces between 46 and 57 months in prison, said in court he began taking the kickback after his wife lost her job and his family faced financial hardship. He will be sentenced in mid-January by US District Judge Bernard Friedman.

Michael Manley, Grimes' lawyer, told reporters after the hearing his client was ashamed and that he had betrayed friends and the UAW.

"Mr. Grimes has taken accountability for what he did," Manley said, calling this a "first step toward redemption."

Grimes is the ninth individual to plead guilty from the long-running federal probe in the UAW and the training funds it operates jointly with Detroit's three automakers.

Manley declined to comment on whether Grimes would cooperate by identifying other union or GM officials connected to the scandal.

- Hurting other union drives -

The pleading also comes at a sensitive time for the UAW, with Jones in the midst of bargaining new labor contracts with Detroit's three automakers.

The current contracts covering 155,000 workers expire Sept. 14. The union said this week it would focus first on talks with GM before moving on to Ford and Fiat Chrysler.

Both GM and the union castigated Grimes' for his conduct.

"These actions represent a stunning abuse of power and trust," GM said.

"There is no excuse for union officials to enrich themselves at the expense of the union membership they represented -- and to steal CHR funds invested by GM for training our hourly employees," the automaker added.

"The conduct admitted by Mr. Grimes in his plea today is shocking and absolutely disgraceful," UAW spokesman Brian Rothenberg said in a statement e-mailed to AFP.

The UAW statement noted the UAW has adopted a series of internal reforms.

The scandal has also led to calls for reform from within the union.

"I am sad and angry at what the scandal has done to our union," said Frank Hammer, a retired UAW staff member and activist who was at the hearing in Ann Arbor, west of Detroit.

"I'm here to cheer on the prosecutors," said Bob Dechetler, a retired UAW member from Toledo, Ohio. "We want the union cleaned up. We want the bad guys gone."

Paul Wolfarth, another retired UAW member who turned out for the hearing, said the scandal has undermined union organizing drives at Volkswagen and Nissan.

"All they do is say, 'Look at the corruption,'" he said.

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